Is this trend a good trading opportunity?
Will Tullow Oil turn, or will it continue to gain momentum toward 225p?
- The chart shows price action since early November.
- Currently trading at 200p (as of the time of writing).
- Tullow Oil shares are -3.5% from 2019 highs; +16.5% from 2018 lows; +11.7% year-to-date.
- Oil prices rise, helped by weaker USD, lower oil inventories and progress on US-China trade talks.
- Oil companies like Tullow Oil are directly benefiting from higher commodity prices.
- In the past 2 weeks, the shares have risen over 17%. Will this momentum continue?
- Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal
Trading Tullow Oil – An Example
Let’s say the trend appeals to you, you think it’s likely to continue. You decide to buy exposure to £10,000 worth of Tullow Oil using a CFD, at the current price of 200p. To do this, you need £2,000.
Let’s assume Tullow Oil trend continues to 225p November highs (+12.5%). Your profit would be £1250, from your initial investment of £2,000.
Conversely, let’s assume you open the above position, and place a stop-loss at 5% below the current price. Tullow Oil falls 5% and hits your stop-loss. Your loss would be £500.
This is provided for information purposes only. It should not be taken as a recommendation.